The 2024 Afrinvest Banking Sector Report, set to be unveiled on Wednesday, July 31, will delve into critical topics such as banking recapitalisation, the Federal Government’s $1 trillion economic goal, and the evolving global financial landscape.
This year’s edition, spearheaded by Afrinvest West Africa Limited under the leadership of Ike Chioke, will explore the implications of global economic risks and domestic policy changes on Nigeria’s banking sector. Key themes will include the recapitalisation of Deposit Money Banks and its role in achieving the country’s economic targets.
The report will feature discussions on various aspects of the banking sector, including:
- The historical impact of previous recapitalisation efforts, such as those in 2004/2005 and 2010
- The current performance of banks relative to capital benchmarks
- The potential of recapitalisation to drive Nigeria’s ambition for a $1 trillion economy, with comparative insights from Indonesia and post-recapitalisation infrastructure development
Afrinvest’s report will also review the Nigerian banking sector’s performance through 2023 and the first quarter of 2024, highlighting the sector’s evolution through multiple recapitalisation phases. For instance, the 2004/2005 recapitalisation led by then-Central Bank of Nigeria Governor, Prof. Chukwuma Soludo, significantly reduced the number of operational banks and addressed corporate governance issues. However, it also led to an increase in non-performing loans and other risk management challenges.
The report notes that the Central Bank of Nigeria’s recent capital requirement guidelines, issued in March 2024, are intended to strengthen the financial system and support the $1 trillion economic target by 2032. Despite these efforts, the report cautions that the new capital thresholds may face challenges due to macroeconomic fluctuations and their impact on banks’ risk profiles.
The upcoming launch of the report is expected to offer valuable insights for both domestic and international investors regarding Nigeria’s economic and banking landscape, and the ongoing recapitalisation’s role in achieving the country’s economic aspirations.
